2021 (12) TMI 1145 - HC - GST

Cancellation of Bail - violation of conditions of Bail - generation of black money and hawala transactions - issuance of fake paper invoices - Section 70 of the CGST Act, 2017 - HELD THAT - It cannot be observed to the effect that the applicant/ petitioner had violated the condition no.4 of the order dated 05.12.2020 in as much as investigation in the matter qua any future commission of the offence after 05.12.2020 is still in progress as submitted on behalf of the respondent and presently there are only disclosure statements of two accused Manish and Vikas against the petitioner qua further alleged commission of offence after 05.12.2020, the condition no.4 of the order dated 05.12.2020 cannot be held to be violated presently. In view thereof though the order dated 22.12.2021 of the learned CMM, New Delhi, PHC setting aside the grant of bail granted vide order dated 05.12.2020 is set aside, it is essential to observe that direction dated 22.12.2021 of the learned CMM, New Delhi whilst disposing of the application seeking cancellation of bail as filed by the respondent herein before the learned CMM, New Delhi after the cancellation of bail granted - Petition disposed off.

Issues Involved:
1. Setting aside the order dated 22.12.2021 of the learned CMM.
2. Restoration of bail granted on 05.12.2020.
3. Alleged violation of bail conditions by the petitioner.
4. Validity of the respondent's application for cancellation of bail.
5. Justification for classifying offences for bail considerations.
6. Petitioner's compliance with court appearances.

Detailed Analysis:

1. Setting Aside the Order Dated 22.12.2021:
The petitioner sought the setting aside of the order dated 22.12.2021 by the learned CMM, which cancelled the bail granted to the petitioner on 05.12.2020. The court observed that the cancellation was based on alleged violations of bail conditions, specifically condition no.4, which prohibited the petitioner from indulging in similar offences in the future. The court found no substantial evidence beyond the disclosure statements of two associates, Manish and Vikas, to support the claim that the petitioner committed further offences after 05.12.2020. Consequently, the court set aside the order dated 22.12.2021.

2. Restoration of Bail Granted on 05.12.2020:
The petitioner was originally granted bail on 05.12.2020 with conditions including joining the investigation, not tampering with evidence, not leaving the country without permission, not indulging in similar offences, and appearing in court on every hearing date. The court reinstated the bail, noting that the petitioner had complied with these conditions until the allegations arose. The court emphasized that the mere disclosure statements by Manish and Vikas were insufficient to prove further offences by the petitioner.

3. Alleged Violation of Bail Conditions by the Petitioner:
The respondent claimed that the petitioner violated condition no.4 by engaging in similar offences post-bail. The court found no additional incriminating evidence beyond the disclosure statements of Manish and Vikas, which had not been retracted. Therefore, the court concluded that the petitioner had not violated condition no.4.

4. Validity of the Respondent's Application for Cancellation of Bail:
The respondent's application for cancellation of bail, based on the alleged violation of condition no.4, was found to lack substantial evidence. The court noted that the investigation was still in progress and no new incriminating material had been presented. The court also referenced a previous order dated 18.01.2021, which had dismissed a similar application, emphasizing that the petitioner's age, cooperative behavior, and lack of criminal antecedents were valid considerations for granting bail.

5. Justification for Classifying Offences for Bail Considerations:
The court reiterated that bail should not be withheld as a form of punishment and that classifying offences into categories such as economic offences should not automatically lead to bail refusal. The court cited the judgment in "H.B. Chaturvedi Vs. CBI," which held that bail should not be refused based on the category of the offence alone.

6. Petitioner's Compliance with Court Appearances:
The respondent alleged that the petitioner failed to appear in court on 20.12.2021 and 21.12.2021, violating condition no.5. The petitioner explained that he was suffering from COVID-19 symptoms and had been advised to isolate. The court accepted this explanation and noted that the petitioner's absence was justified under the circumstances.

Conclusion:
The court set aside the order dated 22.12.2021, reinstated the bail granted on 05.12.2020, and directed the petitioner to deposit costs of ?1 lakh with the Delhi High Court Legal Services Committee. The petition was disposed of accordingly.

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